Allstate Employees & RMDs: What You Need to Know Before Age 73
Healthcare Provider Update: Allstate utilizes Cigna as its primary healthcare provider for its health insurance offerings.
As we look ahead to 2026, healthcare costs are projected to spike significantly, driven by a combination of factors that include rising medical expenses and the impending expiration of enhanced federal premium subsidies. Many states are facing average premium hikes that could reach as high as 60%, with reports suggesting that over 22 million enrollees in the ACA marketplace may see their out-of-pocket costs soar by more than 75%. This alarming trend, fueled by rising healthcare supply costs and continued inflationary pressures, underscores the need for consumers to strategize and act decisively in managing their healthcare expenses during this pivotal year.
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'Allstate employees can stay ahead of required minimum distributions by planning early and thoughtfully coordinating withdrawals with their broader retirement income goals.' — Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.
'Allstate employees can benefit from understanding RMD rules early so they can thoughtfully incorporate withdrawals into a long-term income plan that fits their personal goals and timing.' — Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.
In this article, we will discuss:
When and how required minimum distributions (RMDs) must be taken.
Which retirement accounts are subject to RMD rules.
Strategies to thoughtfully use RMD withdrawals in retirement.
Under IRS rules, required minimum distributions (RMDs) begin at age 73 for those born between 1951 and 1959. Under these rules, you must take out a specific amount of money annually from tax-deferred retirement plans, such as IRAs, 401(k)s, and 403(b)s, once you turn 73. Answers to common questions are provided below to help you move forward confidently.
What is a required minimum distribution (RMD)?
A required minimum distribution (RMD) is a set amount of money that the IRS mandates you withdraw each year from your tax-deferred retirement accounts beginning at age 73, including accounts you may have contributed to while working for Allstate.
When do I have to take my RMD?
Every year on December 31, your RMD must be taken. You can wait until April 1 of the year after your 73rd birthday to take your first RMD—but only your first. Delaying may result in taking two RMDs in the same year, which could increase your taxable income.
If I keep working, do I still need to take an RMD?
If you continue working past age 73 and remain in an employer-sponsored plan with your current employer, you may be able to delay RMDs from that account if:
- You are still actively employed
- You own no more than 5% of the company
- The employer plan permits delayed RMDs
This applies only to the plan with your current employer—not to IRAs or plans from former employers.
How is my RMD calculated?
Your RMD is generally calculated by dividing your retirement account balance as of December 31 of the previous year by a life-expectancy factor published by the IRS. The IRS Uniform Lifetime Table is typically used unless a spouse more than 10 years younger is the sole beneficiary.
What can I do with my RMD once I take it?
It helps to think through your options before withdrawing your RMD. For example, Allstate professionals may:
Invest it: Place funds into a taxable investment account or contribute to a 529 plan (if eligible)
Spend it: Apply funds to retirement lifestyle needs
Gift it: Use a Qualified Charitable Distribution (QCD) directly from an IRA, which can satisfy RMD rules starting at age 70½ and is excluded from taxable income. For 2025, QCDs may reach up to
$108,000 per person
1
Which accounts require RMDs?
RMDs generally apply to:
- Most 401(k) and 403(b) plans
- Traditional, rollover, SIMPLE, and SEP IRAs
- Certain small business retirement accounts
Roth accounts in workplace plans—like a Roth 401(k)—do not require RMDs for the original owner starting in 2024. Beneficiaries of inherited Roth accounts may still need to withdraw funds.
What if I inherit an IRA?
Many general RMD rules still apply to inherited accounts. Your required withdrawal schedule depends on your relationship to the original account owner and applicable IRS inheritance rules.
Can I take all my RMDs from one account?
It depends on the account type:
IRAs: Can be aggregated and withdrawn from one or multiple IRA accounts
403(b)s: May be aggregated but calculated separately
401(k)s: Must be calculated
and
withdrawn from each account individually—including any Allstate balance still held
Extra withdrawals do not count toward future years’ RMDs.
Are RMDs taxed?
Yes. RMDs are taxed as ordinary income and may be subject to both federal and state income taxes. Taking two RMDs in one year, often caused by delaying the first, can increase your taxable income.
Need help creating your RMD strategy?
Understanding RMDs can influence how you structure your retirement income—especially for Allstate employees shifting from workplace plans to personal withdrawal strategies. The Retirement Group can help you build an approach that aligns with your situation. Call us at
(800) 900-5867
to get started.
5. Myers, Elizabeth A.
Required Minimum Distribution (RMD) Rules for Original Owners of Retirement Accounts.
Congressional Research Service, 29 Aug. 2024,
www.congress.gov/crs-product/IF12750
.
How does the Allstate Retirement Plan ensure that employees are adequately informed of their retirement benefits and options? Specifically, what resources does Allstate offer to help participants understand the complexities of their benefits, and how can employees stay updated on changes to the Allstate Retirement Plan?
Allstate Retirement Plan resources: Allstate provides resources through its website AllstateGoodLife.com, where employees can model different pension scenarios, compare benefit estimates, and request pension statements. Employees are also encouraged to contact the Allstate Benefits Center for personalized support. Regular updates about the plan, including changes in compensation and interest credits, ensure participants stay informed(Allstate_Retirement_Pla…).
In what ways does the Allstate Retirement Plan accommodate employees who might need to take a leave of absence due to military duty? Discuss how the plan's provisions align with federal regulations and the protections offered to ensure that employees do not lose accrued benefits during such leaves.
Military leave accommodations: The Allstate Retirement Plan adheres to the Uniformed Services Employment and Reemployment Rights Act (USERRA), ensuring that employees on military leave continue to accrue benefits and vesting service under the plan. Interest credits will continue to be added to their accounts during the leave(Allstate_Retirement_Pla…).
What factors determine the calculation of the Cash Balance Benefit under the Allstate Retirement Plan? Detail how annual compensation is integrated into benefit calculations, and what limitations exist concerning eligible compensation for retirement benefits.
Cash Balance Benefit calculation: The Cash Balance Benefit is based on pay credits and interest credits. Pay credits depend on the employee’s years of vesting service, and are calculated as a percentage of their annual compensation. Annual compensation includes salary, bonuses, and certain paid leave, but excludes severance payments and certain awards. The benefit is subject to IRS limits(Allstate_Retirement_Pla…).
Can you explain the differences between the Final Average Pay Benefit and the Cash Balance Benefit as part of the Allstate Retirement Plan? Discuss how benefits are accrued under each formula and the implications for employees transitioning between plans.
Final Average Pay vs. Cash Balance Benefit: The Final Average Pay Benefit was frozen as of December 31, 2013, for participants, while the Cash Balance Benefit is an ongoing accrual based on eligible annual compensation and interest credits. Employees with preserved Final Average Pay Benefits can receive both this benefit and a Cash Balance Benefit, creating a dual structure for those transitioning between plans(Allstate_Retirement_Pla…).
What options do Allstate employees have for designating beneficiaries under the Retirement Plan, and how do these choices impact the benefits received by the designated individuals? Discuss the procedures for updating beneficiary designations and the importance of keeping this information current.
Beneficiary designations: Employees can designate beneficiaries for their Cash Balance and Final Average Pay Benefits through AllstateGoodLife.com. It is crucial to update beneficiary designations after significant life events such as marriage, as spousal consent is required for naming someone other than the spouse. Keeping this information current ensures smooth benefit distribution(Allstate_Retirement_Pla…).
How does the Allstate Retirement Plan define and measure Vesting Service, and why is it critical for employees to understand this definition? Explain the implications of Vesting Service on eligibility for benefits and the calculations involved in determining retirement pay.
Vesting Service definition: Vesting Service is used to determine eligibility for benefits and is based on the total years of service with Allstate, including military leave and breaks in service under certain conditions. Employees must understand this concept, as vesting impacts their eligibility to receive retirement benefits, generally after three years of service(Allstate_Retirement_Pla…).
What steps must Allstate employees follow to commence payment of their retirement benefits when they reach eligibility? Outline the necessary paperwork and timelines involved, as well as how timely submissions can affect payout dates.
Commencing retirement benefits: To commence payment of retirement benefits, employees must notify the Allstate Benefits Center 30 to 60 days prior to their selected Payment Start Date. This process involves submitting paperwork via the website or phone, with the payment date starting on the first day of the month(Allstate_Retirement_Pla…)(Allstate_Retirement_Pla…).
How do the provisions of the Allstate Retirement Plan address scenarios where an employee transitions to independent contractor status? Discuss the impact of this transition on their previously accrued benefits and any applicable rules that pertain to their retirement planning.
Transition to independent contractor status: Independent contractors are generally not eligible for the Allstate Retirement Plan. However, employees who previously accrued benefits under the plan before transitioning to contractor status will retain those benefits, but no further credits will accrue during their time as a contractor(Allstate_Retirement_Pla…).
How are employees of Allstate notified of their rights under ERISA, and what resources are available for participants who believe their rights have been violated? Discuss the role of the Administrative Committee in safeguarding participant rights and ensuring compliance with federal regulations.
ERISA rights and resources: Employees are informed of their rights under ERISA through plan documents and can contact the Allstate Benefits Center for assistance. The Administrative Committee ensures compliance with ERISA and oversees participant rights, including providing resources for claims and disputes(Allstate_Retirement_Pla…).
How can employees contact Allstate to learn more about their retirement benefits detailed in the Allstate Retirement Plan? Include specifics on the best methods for reaching out, including contact numbers and online resources available to employees for additional assistance.
Contacting Allstate for retirement plan information: Employees can contact Allstate through the Allstate Benefits Center at (888) 255-7772 or online at AllstateGoodLife.com. The website provides access to pension estimates, beneficiary management, and retirement planning tools(Allstate_Retirement_Pla…).
With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.
Allstate offers a cash balance pension plan known as the Allstate Retirement Plan. Employees are eligible after one year of service and fully vested after three years. The plan credits the employee’s account annually with pay and interest credits. Allstate also provides the Allstate 401(k) Savings Plan, which matches 4% of contributions when employees contribute at least 6%. Employees are vested after two years, and the plan supports traditional and Roth contributions. [Source: Allstate Benefits Guide, 2022, p. 22]
Restructuring and Layoffs: Allstate has undergone significant layoffs as part of its "Transformative Growth Plan." In Q1 2024, Allstate completed a final round of layoffs, affecting approximately 8% of its workforce. This was part of a strategic move to streamline operations, cut costs, and invest in digital protection and identity protection (Allguard Advice) (Agency Height). Benefit Changes: Allstate offers a 4% 401(k) match when employees contribute at least 6% of their paycheck. Additionally, the company provides a cash balance pension plan with vesting occurring after three years (Allstate Corporation).Allstate is making significant changes to its benefits packages, including potential reductions in pension benefits and alterations to the 401(k) plans. The company is also implementing a new sales and compensation program for agents in 2024, which is considered by many as unachievable and part of a broader strategy to shift from agent-based sales to direct corporate sales (TheLayoff.com) (TheLayoff.com). Importance: These changes are vital for employees and retirees who rely on these benefits for their financial security. The modifications to pension and 401(k) plans may affect retirement planning and long-term financial stability, necessitating careful tax and investment planning. Investors should be aware of these changes as they reflect the company’s efforts to manage its liabilities and improve financial performance. Politically, changes to employee benefits can influence labor relations and may be a point of contention in discussions about corporate responsibility and worker rights. |
| Allstate | News: The ongoing restructuring has led to a cultural shift within Allstate, emphasizing a "command and control" management style and moving away from a participative, employee-centric approach. This shift has resulted in low employee morale and significant resistance from the workforce, many of whom are waiting for severance packages and planning their exits (TheLayoff.com) (TheLayoff.com). Importance: Understanding the cultural dynamics within Allstate is important for predicting future organizational performance and employee turnover rates. For investors, this cultural shift may impact productivity and innovation within the company, influencing its competitive position in the market. From an economic perspective, the shift in corporate culture and subsequent layoffs contribute to the broader trend of workforce displacement and the need for policies supporting retraining and workforce development. Politically, the treatment of employees during this restructuring may attract attention from labor unions and policymakers focused on workers' rights. |
Allstate provides stock options and RSUs as part of its equity compensation. Stock options are granted with a predetermined price and vesting period, while RSUs vest over a few years based on performance or tenure. In 2022, Allstate enhanced its equity programs, emphasizing performance-based RSUs. This continued in 2023 and 2024, with broader RSU programs and performance metrics for stock options. Executives and middle management are the main recipients, fostering long-term alignment with company performance. [Source: Allstate Financial Reports 2022-2024, p. 62]
In 2022, Allstate introduced improvements to its healthcare benefits, including enhanced mental health support and expanded telemedicine services. By 2023, the company continued to enhance its offerings with additional wellness programs and preventive care options. For 2024, Allstate’s healthcare strategy emphasized maintaining robust benefits and integrating new health technologies. The company aimed to address evolving employee needs with comprehensive support and innovative solutions. Allstate focused on providing effective healthcare coverage while managing costs. Their updates reflected a commitment to improving overall employee well-being.
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